DOE audit report recommends improvements to bioenergy funding

By Erin Voegele | September 20, 2013

The U.S. DOE’s Office of Inspector General recently published up an audit report analyzing the approximately $603 million in financial assistance the DOE has provided to biorefinery projects over the past seven years. As part of the audit, the Office of Inspector General made several recommendations, which the management of the Bioenergy Technologies Office has concurred with.

The DOE’s Bioenergy Technologies Office supports the development of biofuel, bioproducts and biopower projects via financial assistance for the development of pilot-, demonstration- and commercial-scale projects.

The audit report specifies that the Bioenergy Technologies Office issued three funding opportunity announcements (FOAs) in 2006, 2007 and 2009, selecting a total of 29 projects to fund. As of March 2013, the report estimates $929 million has been obligated to those projects, with 65 percent or $603 million expended to date. A significant portion, $561 million, of the obligated funding came from the American Recovery and Reinvestment Act of 2009.

The report also specifies that the DOE’s goal was to demonstrate the operation of three integrated biorefineries by 2012, and validate annual production capacity of 100 million gallons of advanced biofuels by 2014, which was to be derived from 10 demonstration- and commercial-scale facilities. These goals have not yet been met. While the Bioenergy Technologies Office reported that the goal to demonstrate three integrated biorefineries by 2012 was met, the Office of the Inspector General noted none of those projects were commercial scale.

The audit reports lists poor market and financial conditions as factors contributing to the inability to achieve program goals.

In order to improve the efforts of the Bioenergy Technologies Office, the audit report includes three primary recommendations designed to help the assist in achieving commercial-scale and demonstration-scale operations. First, the inspector general recommends that biomass technologies are validated at each scale of development before awarding funds for the next scale. Second, the inspector general recommends common issues that delay projects or cause cost overruns are formally documented, along with project successes and best practices. Finally, the audit report recommends the resolution of a 2011 integrated biorefinery peer review recommendation to conduct a “Blue Ribbon” review of project failures, which looks at the circumstances around a project failure.

A full copy of the report is available on the DOE website